HDFC Bank and Indian Bank

Indian bank is having similar ratios as what hdfc bank had 6 years back in FY05. HDFC is now at 2053 (even after the recent banking fall) whereas Indian Bank is at 210. Indian bank being a public sector bank will not grow as fast as HDFC bank. I expect indian bank to reach at least 5 times its current price to 1000 in 6 years. That does not it will not fall to Rs. 100 in the near future. As banking stocks are selling cheaper these days, anything can happen.

But I believe, if anything real bad happens, government will always save the banks, as people will be affected and things will go against the government. PSB's are prone to fraud, but they are small frauds which wont bring the banks down. Even if they are big, government safeguards every depositor.

all in crores	indian bank	hdfc bank
market cap	9000	95000
fy10 NP	1554	2948
avg npm	18.5	17.5
reserves	6217	21000
debt	89185	180320

1.5 to 2% dividend yield (paid twice a year) is almost like an assured dividend as long as bank is profitable.

I like Indian Bank. buying at 210, adding more if falls - but will sell only at 1000 - this price must come anytime before 2016 end. Buy it if you like it.


how Indian bank fy09 and hdfc in fy05 were similar

	HDFC bank Mar '05	Indian bank Mar '09
Face Value	10	10
Dividend Per Share	4.5	5
Operating Profit Per Share (Rs)	41.65	37.37
Net Operating Profit Per Share (Rs)	120.17	166.88
Free Reserves Per Share (Rs)	99.78	81.59
Profitability Ratios
Interest Spread	5.39	4.47
Adjusted Cash Margin(%)	26.63	17.35
Net Profit Margin	17.77	16.25
Return on Long Term Fund(%)	50.77	102.16
Return on Net Worth(%)	23.67	22.03
Adjusted Return on Net Worth(%)	14.72	22.03
Return on Assets Excluding Revaluations	1.66	127.52
Return on Assets Including Revaluations	1.66	156.73
Management Efficiency Ratios
Interest Income / Total Funds	7.95	9.37
Net Interest Income / Total Funds	5.14	3.85
Non Interest Income / Total Funds	0.04	0.64
Interest Expended / Total Funds	2.81	5.51
Operating Expense / Total Funds	2.38	1.76
Profit Before Provisions / Total Funds	2.09	2.63
Net Profit / Total Funds	1.82	1.63
Loans Turnover	0.17	0.16
Total Income / Capital Employed(%)	7.99	10.01
Interest Expended / Capital Employed(%)	2.81	5.51
Total Assets Turnover Ratios	0.08	0.09
Asset Turnover Ratio	2.89	3.27
Profit And Loss Account Ratios
Interest Expended / Interest Earned	42.53	61.81
Other Income / Total Income	0.55	6.41
Operating Expense / Total Income	29.84	17.54
Selling Distribution Cost Composition	1.47	0.12
Balance Sheet Ratios
Capital Adequacy Ratio	12.16	13.27
Advances / Loans Funds(%)	68.21	76
Debt Coverage Ratios
Credit Deposit Ratio	64.87	68.33
Investment Deposit Ratio	57.83	33.46
Cash Deposit Ratio	7.78	9.46
Total Debt to Owners Fund	8.04	13.32
Financial Charges Coverage Ratio	2	1.5
Financial Charges Coverage Ratio Post Tax	1.76	1.32
Leverage Ratios
Current Ratio	0.03	0.02
Quick Ratio	5.61	15.3
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit	23.99	21.34
Dividend Payout Ratio Cash Profit	16	19.94
Earning Retention Ratio	76	78.66
Cash Earning Retention Ratio	83.99	80.06
AdjustedCash Flow Times	36.45	54.58
Earnings Per Share	35.64	35.25
Book Value	169.24	154.66